Bressler Risk Blog

Michigan Business Court: “Attorneys – Disqualification. Michigan Business Court” —

• “Where a plaintiff has moved to disqualify a law firm from serving as the defendants’ counsel, that motion should be denied because the plaintiff is neither a client nor former client of the firm.”
• “This matter is before the Court on Plaintiff’s motion to disqualify Warner Norcross + Judd LLP (‘WNJ’) from serving as Defendants’ counsel. …”
• “‘Plaintiff alleges that in late 2024, he, Defendants Richard and Deborah Wranosky (collectively, the Wranoskys), and non-party William Jones organized Defendant BRKS Group, LLC for the purpose of operating Wolf Gym-Utica under a franchise agreement with non-party W.O.L.F. Fitness Gyms, LLC.”
• “Plaintiff argues a conflict of interest exists that precludes WNJ from representing Defendants. According to Plaintiff, John MacKenzie, an attorney at WNJ was BRKS’ corporate counsel as early as October 2025, during which time he ‘provid[ed] legal advice to Plaintiff Jackson directly about his day-to-day service as Manager of BRKS.’ … Plaintiff appears to maintain that he was WNJ’s client, so WNJ’s representation of Defendants here is directly adverse to him. He also argues that MacKenzie is a necessary witness in this case based on ‘MacKenzie’s continual and pervasive involvement in the formation and operations of BRKS, and especially in the dispute that eventually arose between Plaintiff Jackson and the other Defendants.…”
• “‘To support his contention that WNJ represented him as a client, Plaintiff first cites emails from October 2025 (Mot. Ex. 1) and August 2025 (Mot. Exs. 4 and 5.) …”
• “‘None of Plaintiff’s evidence demonstrates that he was WNJ’s client. Instead, it shows that WNJ represented BRKS, which is distinct from its members (i.e., the Wranoskys and Plaintiff). MRPC 1.13(a). Because Plaintiff is neither a client nor former client of WNJ, WNJ’s representation of Defendants is not a conflict of interest.”
• “‘Plaintiff also argues that MacKenzie is a necessary witness in this case, so he is precluded from representing Defendants. This argument also lacks merit.”
• “… Plaintiff has not explained how MacKenzie’s involvement in the formation and operations of BRKS is relevant to this action, nor has he explained how MacKenzie was involved in the dispute between Plaintiff and the Wranoskys such that MacKenzie is a necessary witness. Moreover, Plaintiff has not addressed, let alone demonstrated, that there are no other witnesses who could give the same substantive testimony about the dispute between Plaintiff and the Wranoskys as MacKenzie. Thus, Plaintiff has failed to demonstrate MacKenzie is a necessary witness.”

“Private Law Firm Stipend Does Not Bar Judge From Hiring Law Student as Intern: Judicial Ethics Opinion 26-65/26-66” —

• “Digest: A judge may hire as a summer intern a law student who will receive a stipend from a private law firm for any public service internship that summer, provided the judge (1) insulates the intern from any cases in which the law firm appears and (2) discloses the insulation and the basis for it. Assuming the judge concludes, in his/her sole discretion, that he/she can be fair and impartial in matters involving the law firm, the judge may preside after such insulation and disclosure.”
• “Rules: Judiciary Law § 14; 22 NYRR 100.2; 100.2(A); 100.2(B); 100.3(C)(2); 100.3(E)(1); Opinions 25-24; 22-181; 15-14; 13-80.”
• “Ordinarily the ‘decision whether to engage a student intern is within the discretion of the judge and does not generally raise ethical concerns’ (Opinion 25-24). Here, the question presented is whether a trial court judge may hire a law student for a summer internship, given that a law firm has hired the law student for a paid summer internship the following summer and has offered the law student a $25,000 stipend as an incentive for taking a public service internship this summer. In our view, it is significant that the stipend is not targeted specifically to a judicial internship, but would apply equally to other public service internships or even, potentially, internships with for-profit entities aligned with the law firm’s practice areas.”
• “In Opinion 22-181, we said that a trial court judge may hire a law student for a judicial internship for academic credit ‘while the student is simultaneously employed part-time in a non-legal paid position at an investment bank which has cases before the judge.’ Moreover, we said that, assuming the judge can be fair and impartial, ‘the judge may still preside in cases involving the bank, but must disclose to the parties the student’s relationship with the bank and insulate the student from those cases’ (id.; see also Opinions 15-14; 13-80). In our view, the same principles apply here.”
• “Accordingly, the inquiring judges may hire the law student interns, provided they insulate the interns from any cases in which the sponsoring law firm appears and disclose the insulation and the basis for it. Assuming the judge can be fair and impartial in matters involving the law firm, which is a matter left to the judge’s sole discretion, the judge may preside after insulation and disclosure. The obligation to disclose ends when the judicial internship ends.”

David Kluft asks: “Can I partner with an ABS if my state doesn’t allow them?” —

• “An Alternative Business Structure (ABS) is essentially a law firm owned in part by non-lawyers, which is a no-no in most states but not in AZ. SC does not allow ABS structures, but an AZ ABS wanted to find a SC lawyer to take SC lawyer cases. The deal would be that the ABS finds the clients, then gets local counsel to do most, if not all, of the legal work. The local counsel shares the fee with the ABS and, by extension, it’s non-lawyer partners.”
• “The SC Bar, with reference to other opinions in TX and MD, put the kibosh on this arrangement. Rule 5.4 prohibits fee sharing with non-lawyers. The opinion went out of its way to warn the ABS that slightly tweaking the payment arrangement will not help: “the manipulation of the method of effectuating the split between Lawyer and … and ABS … is irrelevant.”
• “The whole ABS thing was pitched to regulators in the same way for-profit entities always attempt to convince us to diminish ethical regulation: they promise that allowing brilliant entrepreneurs to innovate will lead to ‘access to justice’ (because we all agree venture capitalists have done so much more than lawyers to protect civil rights for the poor, right? Right??). If local counsel does all the work and just pays a fee to the ABS afterwards, the ABS is not an innovative law firm. It is instead is nothing more than an affiliate marketer, using its considerable resources not to innovate, but to leech online leads for local cases away from local lawyers and then take a cut off the top while doing nothing.]”
• Opinion: here.

“Law firm Quinn Emanuel wins fight over role in data center case” —

• “Law firm Quinn Emanuel can continue representing a steel plate manufacturer suing Bitdeer Technologies over a data center project in Ohio after a judge denied the cryptocurrency miner’s bid to disqualify ​the firm based on its prior legal work for Bitdeer.”
• “The firm is ‘on both sides of the‘v’in matters involving the same business group.’ Bitdeer said, arguing that Quinn obtained ‘confidential financial ​and operational information’ in the ​New York case that ⁠is relevant to the Ohio litigation.”
• “In her ruling, Judge Julie Selmon of the ‌Court of Common Pleas in Monroe, Ohio this week said Bitdeer had previously waived its right to object to Quinn Emanuel Urquhart & Sullivan taking on cases against it.”
• “Quinn Emanuel’s client, American Heavy Plate Solutions, alleges in the Ohio lawsuit that Bitdeer and ​other defendants are pursuing a data center project in violation of American Heavy’s lease rights. The ​law firm is simultaneously representing Bitdeer in federal court in New York in unrelated litigation.”
• “‘Replacing ⁠Quinn Emanuel would impose material duplication, delay and substantial expense that would prejudice AHP’ in the Ohio case, Selmon ​wrote in her Sept. 8 order.”
• “Quinn Emanuel in a statement on Friday said it welcomed the judge’s ruling. ‘While adversaries often seek to disqualify us for tactical reasons, we have a robust and principled process for vetting potential conflicts,’ the firm said.”
• “The Ohio judge’s ​ruling comes amid a spate of legal fights in which Quinn Emanuel has fought claims that it has a ​conflict of interest and should be disqualified. Judges in at least three recent cases have disqualified the firm due to conflicts. Quinn Emanuel in those ‌cases ⁠denied the firm had violated conflict-of-interest rules.”

“Omnis Energy: Judge Disqualifies HSF Kramer from Representing Pleasants Power Station in Bankruptcy Case” —

• “The U.S. Bankruptcy Court disqualified HSF Kramer from representing Pleasants Power Station in Chapter 11, sustaining objections raised by Omnis Fuel Technologies and the Office of the United States Trustee and denying the retention application.”
• “‘Applying an objective standard, I conclude that Kramer’s prior representation of TRAG gives rise to an actual conflict of interest, precluding its retention by the Debtor,’ Owens said. She called Kramer’s work for the Debtor on TRAG’s cash collateral and related protections, stipulations and releases ‘a glaring example of the conflict.’ TRAG, led by celebrity motivational speaker Tony Robbins, and affiliate RG Energy are Pleasants’ largest asserted creditors and hold substantial interests in its parent companies.”
• “Owens also found that Kramer possesses relevant client confidences it cannot reveal. Even if the conflict were only potential, she ruled, Young Conaway could not adequately resolve it without ‘unnecessary confusion, inefficiencies, distraction and distrust.'”
• “Owens expressed ‘grave concerns’ about the original decision of the Debtor’s independent manager to hire Kramer when the firm was already providing services to TRAG. ‘Nonetheless, I have no choice,’ she said. ‘Kramer cannot be retained under Section 327.'”
• “Young Conaway remains in place as the Debtor’s Delaware co-counsel. It had been designated to serve as conflicts counsel on matters Kramer could not handle. Owens said she was confident that ‘Young Conaway or any appropriate replacement co-counsel’ could transition into Kramer’s broader role ‘quickly and efficiently,’ so that ‘this early stage proceeding will not be disrupted.'”
• “The decision does not remove Houlihan Lokey as the Debtor’s investment banker for the West Virginia power station’s sale or alter the sale calendar. On September 3, Owens said, ‘I want the parties’ laser focus on the sale process,’ and would not jeopardize ‘the integrity of that process or undermine the bidders and their attention to this.'”
• “Omnis supported Houlihan’s retention and will cooperate in developing qualified bidders. Houlihan and current management administer the process, subject to fiduciary duties, consultation and Owens’ oversight. Omnis/Quantum and TRAG/RGE have equivalent consultation-party rights; TRAG/RGE separately assert lender, lien and credit-bid rights.”

David Kluft asks: “What happens if the judge I’m appearing before is in my fantasy football league?” —

• “A judge asked the NY Advisory Committee in Judicial Ethics if judges are permitted to appear in an online fantasy football league with attorneys who might appear before them. The league involved low stakes ($20-$100), no in-person events, and was comprised of the judge’s former colleagues (i.e., other lawyers).”
• “The Committee thought participating in the league was fine and did nothing to diminish the court’s integrity or impartiality, especially in light of a court decision that interactive fantasy sports were “skill-based” and not prohibited by state gambling laws.”
• “If another member of the league appears before the judge, the judge will have to decide whether the relationship with that person is close enough to require recusal. However, the mere fact that a lawyer appearing before a judge is an “acquaintance” (a defined term in the rules) in the same fantasy sports league is not sufficient to require disqualification or even disclosure of the relationship, provided the judge can be fair and impartial.”

“Hacked On Thursday, Disqualified On Friday: BigLaw’s Information Problem Gets A Face” —

• “There is no causal link between the two events. That is precisely why they matter. Quinn Emanuel Urquhart & Sullivan had the sort of week that gets discussed at partner retreats for years, through gritted teeth and very painful memories.”
• “On Thursday 3 September, Reuters reported that Quinn Emanuel and McDermott Will & Schulte had both suffered data breaches, both traced to social engineering, both notified to law enforcement. Quinn Emanuel’s incident, dated 14 August, involved what the firm described as unauthorised access to stored files in a single software application through one temporarily compromised user account.”
• “Among the files exposed: documents relating to short seller Muddy Waters, obtained by the firm in a Florida lawsuit. McDermott told the Vermont attorney general its exposed files included Social Security numbers and health data, and characterised the incident as isolated, involving a single user and a limited number of documents.”
• “Roughly thirty hours later, a federal court in the Western District of Texas disqualified Quinn Emanuel from representing Techtronic Industries in its defamation suit against Muddy Waters, finding the firm had obtained relevant confidential information during its earlier representation of Muddy Waters in a related government investigation.”
• “The same firm, the same adversary and the same underlying commodity, which was other people’s secrets.”
• “The two events are legally and factually unconnected. The breach was a criminal act by an outside party. The disqualification was a judicial finding about internal conflict management.”
• “A modern global litigation firm is, functionally, a warehouse of confidential information that happens to bill by the hour. Deal documents, regulatory correspondence, investigation files, board minutes, personal data belonging to people who have never heard of the firm and never consented to it holding anything. Firms have spent fifteen years industrialising the acquisition of that material. Lateral hiring brings in partners with client relationships and, inevitably, with knowledge. International expansion multiplies the jurisdictions in which the material sits and the regulatory regimes that govern it.”
• “Document review platforms, matter management systems, e-discovery vendors and now generative AI tools each add a place where the material is copied, indexed and stored. What has not scaled at anything like the same rate is governance and control over that material.”
• “Conflict systems at most large firms remain a database query, a circulated email and a partner’s judgment about whether a prior matter is ‘substantially related.’ The plain fact is that is not enough.”
• “Two different failure modes, one root cause. The firm knows more than it can track.”
• “Cyber incidents attract the headlines because they involve criminals and Social Security numbers. But for a litigation firm, disqualification is the more directly painful event.”
• “A breach produces notification costs, regulatory correspondence, class action defence and reputational damage… Disqualification is different. It removes the firm from a live, high-value matter, hands the client a fee dispute and a transition problem, and creates a written judicial finding about the firm’s ethics that opposing counsel will cite for years.”
• “Quinn Emanuel disputes the conflict characterisation, saying it was a single attorney briefly represented Muddy Waters on a different matter, and it denies the conflict allegations. Firms are entitled to that position, and disqualification orders are frequently contested. And obviously nothing about a disqualification finding establishes misconduct.”
• “What it does establish is that a court, looking at the firm’s own records, reached a different conclusion about substantial relationship than the firm’s conflict process did.”
• “Three implications for anyone running a large firm.
  • “Lateral due diligence is now an information governance exercise, not a revenue exercise. The question is not only what book of business a partner brings, but what confidential information arrives with them, from whom, and under what undertakings. Engagement letters from prior firms containing non-use covenants do not disappear when the partner moves.”
  • “Conflict systems need to model relationships, not just names. A query that returns ‘no current matter’ for an entity misses the substantially related prior engagement, the affiliate, the fund, the acquired subsidiary. Muddy Waters is not a large organisation. If a firm’s system can miss that, it can miss anything.”
  • “Security failure is now a client-relationship event, not an IT event. Outside counsel guidelines from sophisticated in-house teams already impose security requirements. Expect them to get sharper, to include audit rights, and to include termination triggers. A general counsel who reads that a firm’s entire document store was reachable through one compromised account will ask what else is reachable.”
• “Large firms sell judgment about risk as they advise on breach response, on privilege protection, on information barriers and on the management of conflicts in complex corporate structures. They are, in principle, the people best placed to get this right.”

Ken Rosen is an adviser at Ken Rosen Advisors PC offers analysis worth noting: “How Jackson Walker Settlement Will Affect Conflict Checks” —

• “Jackson Walker LLP’s $15 million settlement with the U.S. Trustee, filed as a term sheet on Aug. 2, has been read as the end of the saga in which the firm had cases before U.S. Bankruptcy Judge David R. Jones while one of its partners was romantically involved with the judge.”
• “David R. Jones while one of its partners was romantically involved with the judge. It reads better as a template: The settlement of In re: Professional Fee Matters Concerning the Jackson Walker Law Firm is effectively a contract between one firm and the government, and every firm practicing in the bankruptcy courts should expect to be held to its terms.[1] The money is the least consequential part.”
• “In the settlement, Jackson Walker agreed to retain an independent third party to confirm that its conflicts screening and disclosure practices work, and to file a report regarding same on the court record. Neither the Bankruptcy Code nor the rule requires that step. One U.S. Trustee’s office has now obtained it by contract, after three years of litigation and a threatened disgorgement of up to $23 million across 33 cases.”
• “Once the reviewer’s report is filed, restructuring firms will measure their conflicts intake and disclosure practices against it, because it will be the only public description of a screening system the U.S. Trustee has accepted. The U.S. Trustee Program is a single national program; what one office obtained in Houston, every office can request. And a court weighing a show-cause order or a disgorgement motion will have a reference point it lacks today.”
• “U.S. Bankruptcy Code, Rule 2014, requires a professional to disclose the connections it knows about and says nothing about the systems that produce that knowledge. The remedy the parties negotiated addresses something far more ordinary than the facts that produced it: whether the firm’s conflict-check system actually finds the connections the rule requires it to disclose. The Jackson Walker settlement fills that gap by consent order rather than by rule.”
• “The reason a negotiated document can function as the standard is that no other document does. Case law defines the duty; nothing defines the method. U.S. Bankruptcy Judge Tina Brozman stated the governing principle in 1994 in In re: Leslie Fay Companies Inc., where Weil Gotshal & Manges failed to disclose connections to audit committee members, the auditor and a major creditor.”
• “Where disclosure itself fails, the cause is often clerical, and that is the territory the Jackson Walker undertakings occupy.”
• “A matter opened years earlier under a shortened client name, a lateral partner’s former engagements never loaded into the database, an affiliate recorded under a trade name — none of these are visible to the partner who signs the declaration, and none are cured by a rule that asks only what the firm knows. The undertakings reach the system that produces the knowledge.”
• “A document with no precedential force can still set the benchmark, and the mechanism is familiar to this bar. The U.S. Trustee has used settlements this way before: Kaye Scholer paid $1.5 million in the GSC Group Inc. bankruptcy case in 2013 and adopted conflict-check and disclosure policies approved by an independent expert, and McKinsey & Co. paid $15 million in 2019 over its disclosures.”
• “The standard is arriving as firms become harder to screen. Fifty-nine law firm mergers closed in 2025, and 43 more have been completed in the first half of this year, by Fairfax Associates’ count, and the July 1 combination of Hogan Lovells and Cadwalader, Wickersham & Taft, the largest in the profession’s history, produced a firm of more than 3,200 lawyers.”
• “A merger requires two firms’ client and matter histories, built over decades under different intake conventions, to reconcile into one conflicts database while the combined firm keeps opening matters, and lateral hiring adds relationships no intake form captured. That benchmark will be applied to firms several times Jackson Walker’s size while their conflicts databases are still being combined.”

“US judge urged to oust law firm Paul Weiss from sugar price-fixing case” —

• “A group of food manufacturers is urging a federal judge to bar law firm Paul Weiss from defending Domino Sugar and its owner ASR Group in a lawsuit over alleged price-fixing in ​the sugar industry, arguing that the firm earlier tried to represent them as plaintiffs in the ‌case. Kraft Heinz, Mondelēz Global, Nestle USA, Hershey and other plaintiffs said in a filing on Tuesday in the federal court in Minnesota that they provided confidential strategy and pricing data to Paul Weiss in 2024 when they were preparing to bring the case and ​the law firm was vying to represent them.”
• “They asked the court to order Paul Weiss to explain ​why it should not be disqualified, arguing that its participation in the case creates conflicts ⁠of interest and that the firm failed to seek or obtain their consent before agreeing to represent ASR ​Group.”
• “According to the filing, Paul Weiss has proposed hiring separate lawyers to defend ASR against Kraft Heinz’s claims specifically, ​because Kraft Heinz is a current client of the firm. The food manufacturers called that proposal ‘unworkable.'”
• “Paul Weiss and a lead attorney for ASR Group at the firm, Djordje Petkoski, did not immediately respond to requests for comment. An outside lawyer for the firm ​in the conflict dispute also did not immediately respond to a request for comment. ASR has denied the plaintiffs’ price-fixing ​claims.”
• “Paul Weiss in court filings has denied that its defense of ASR Group creates a conflict, arguing that the lawyers representing ‌the ⁠company were not involved in discussions with the plaintiffs in 2024. In a letter earlier this year to the food manufacturers, Paul Weiss’ general counsel Kenneth Schneider said the firm’s ‘representation of ASR and Domino is not adverse to Kraft Heinz and is in compliance with our ethical obligations.'”
• “The lead Paul Weiss attorneys who earlier sought to represent the ​food manufacturers, including William ​Isaacson, left the firm last year ⁠to open a new law firm.”
• “Paul Weiss became involved in the case as defense counsel for ASR and Domino in September last year, when Petkoski, the lead attorney for ​the companies, joined Paul Weiss from rival law firm A&O Shearman.”

Dear Ethics Lawyer writes: “Arguing for Current Client Adverse to Position Taken for Former Client” —

• “Q: Dear Ethics Lawyer, I know that in the past you have answered questions about so-called ‘positional conflicts,’ when a lawyer or the lawyer’s firm argues opposing legal arguments for different current clients at the same time, and the limited circumstances in which those can become Rule 1.7(a)(2) material limitation conflicts requiring withdrawal or clients’ consent. I have a situation that’s a bit different.”
• “Two years ago, for a now-former client, I successfully argued the application of a state statute at the trial court level to limit the client’s liability. The case resulted in a judgment for that client, the matter is now over, and we no longer represent them. No appeal was taken, and no precedential decision resulted. Now, for a different client, I plan to argue the opposite side of that question, i.e., that the statute in question does not limit liability of one in our former client’s position. So this is in essence a question about whether I could have a ‘positional conflict’ arising from an argument made in the past for a former client that would fall within Rule 1.7(a)(2).”
• “A: It is theoretically possible, but not very likely. As you may recall, ‘positional conflicts’ caused by representation of two or more current clients usually only arise when the opposing positions are taken in circumstances in which one matter could influence the outcome of the other, e.g., material opposing arguments made in the same court or jurisdiction at the same time, or where the outcome of one argument could be cited in the other in a controlling or influential manner. Here, that does not appear to be the case, given that the matter for your former client is over, and the outcome was not precedential. Under Rule 1.9, your conflict duties to your former client are generally limited to preserving the confidentiality of their confidential information and refraining from adversity to them in the same or a substantially similar matter. I assume that does not apply here. If it does, then you have a conflict under that rule, regardless of the application of Rule 1.7(a)(2). If not, a positional conflict here is unlikely.”
• “I am not aware of a case in which arguments made for a current client that conflict with those made for a former client have been found to be a ‘material limitation’ conflict when duties under Rule 1.9 have not also applied. Rule 1.7(a)(2) includes responsibilities to a ‘former client’ within the list of things that can give rise to a material limitation conflict, and the possibility is referenced in Comment 9 to the rule, but only in reference to Rule 1.9.”
• “Nonetheless, you should consider whether your successful argument in the prior case could be used to your current client’s detriment simply because you made it, or for some other reason that could limit your ability to advance the opposing argument now. Under Rule 1.4, if not also under Rule 1.7(a)(2), it would be wise to disclose the facts to your current client and seek advice from ethics counsel in a close case.”
• “Although remote, a situation could be imagined in which other considerations might apply. For example, there must be a reason that you believe an argument opposite your previous ‘winning’ argument could be successful. There may be a perfectly appropriate reason, such as intervening authority. But, if the reason is something that implicates your personal interests, that could change the calculus. Suppose faulty legal research or analysis in the earlier matter could now be exposed, creating a risk of a malpractice claim or embarrassment for you and a risk to your former client who may have relied on the prior outcome. That exposure might be taken to give you an incentive to argue less vigorously for your current client. In that event your current client, if unsuccessful, could question the outcome regardless of your level of effort. There is no reason to believe that is the case here, but the key to avoiding material limitation conflicts is to examine the interests of the lawyer that might serve to limit the lawyer’s performance or later be found to have done so.”

“UK Poaching Frenzy Has Firms Locking Lawyers in the ‘Garden’” —

• “US law firms racing to expand in London are hitting a speed bump: local rivals that force lawyers to sit on the sidelines for long stretches before they can jump to new jobs. Freshfields, Ashurst, Clifford Chance and other UK law firms are more frequently using ‘garden leave’ to slow partner exits and hold onto business as poachers from across the Atlantic descend on the city. They’re invoking partnership agreements that allow firms to pay lawyers to stay home for as long as six months to a year before they can start working elsewhere and block them from contacting clients during that time.”
• “‘We have seen an increase recently in the number of firms who are either enforcing a gardening leave period or, even if not putting the partner out into the garden, holding the person to their full contractual notice period which also prevents a quick transition to a new firm,’ said Luke Woodward, a managing director for headhunter Major, Lindsey & Africa.”
• “London’s top law firms are swept up in a new free agent market in which corporate partners are more willing to jump ship — and fetching bigger paychecks — than ever before. They’re trying to beat back deep-pocketed American competitors by making partners think twice about leaving.”
• “Freshfields, which has long had garden leave provisions in its agreements, in the last year sought to impose a six-month restriction on exiting partners, according to three people familiar with the situation. Ashurst, which recently completed a merger with Seattle-founded Perkins Coie, has a three-to six-month garden leave period, said one source familiar with the matter. Clifford Chance’s contract requires partners outside of the US to provide six months notice before leaving and gives the firm the power to sideline those lawyers for that period. The firms declined to comment.”
• “Massive firms based in the US, where laws and ethics rules curb the use of garden leave, are deploying their own defensive tactics at home and abroad. Kirkland & Ellis, among the most active poachers, installed a deferred compensation program designed to keep lawyers at the firm after seeing several London partners decamp for Wall Street firm Paul Weiss. US firms also use notice requirements to drag out lateral moves, but generally cannot stretch them to the longer periods seen in the UK.”
• “The increasing use of garden leave threatens to slow US firms’ expansion efforts in a key market. Law firms hired 319 London partners from competitors in the first half of the year, the second-highest total on record, according to a report by legal recruitment consultancy Edwards Gibson. The most prolific hirers in the city were nearly all US firms — Paul Hastings, Eversheds Sutherland, King & Spalding, and Latham & Watkins — the consultancy said. The 81 partners hired in July and August, a typically slow period, is an all-time high, according to Edwards Gibson.”
• “‘The garden leave idea is for firms to make a play to keep more work,’ said DC-based ethics attorney Hilary Gerzhoy. ‘Certain players are paying insane sums of money for lawyers and lateral movement exploded, as opposed to homegrown developing their own lawyers.'”
• “‘If a Magic Circle firm is losing leading partners to US firms, they’ll want to retain the business and are legally entitled to protect their commercial interests, which is why they put people in the garden,’ Clark said. ‘You can try and keep the clients, but you can’t lock someone out of the market so much so that it actually affects their careers,’ he said.”
• “A UK-based partner at another large US firm said some competitors are now imposing punitive measures, like threatening to withhold partner draws when lawyers head for the exits. But that’s done little to stop the churn as hiring firms so far have been willing to pick up the tab, the partner said, requesting to speak anonymously.”
• “Lawyers are also finding ways to be sprung from their gardens, according to the partner. One route is through clients, which can demand that firms drop leave requirements so that important lawyers can continue to work on their matters.”
• “Some partners are now opting to alert their firms that they are considering going elsewhere without formally putting in their notice, Clark said. The tactic brings risk, but it can be used to extract concessions on garden leave and a clean, swift exit, he said.”

“SRA Faces Tighter Supervision After Jenner & Block Finds ‘Shortcomings‘” —

• “The Legal Services Board (LSB) has decided to tighten its oversight of the Solicitors Regulation Authority following an investigation by law firm Jenner & Block into the watchdog’s handling of the collapse of PM Law. The LSB said that ‘significant performance challenges remain‘ at the SRA in light of its handling of the PM Law situation.”
• “Sheffield-based PM Law, which collapsed in February 2026, is being investigated for ‘sophisticated suspected fraud’ surrounding the removal and misuse of £39.5 million of client funds, the SRA said in April.”
• “The LSB oversees the independent regulators of the legal industry in England and Wales, such as the SRA and the Bar Standards Board.”
• “Jenner & Block was appointed to investigate the SRA’s handling of the matter. In its report, the firm identified shortcomings in the SRA’s use of intelligence across its organisation, its investigation into complex financial risks, and the escalation of serious concerns to decision makers. It argued that the SRA failed to aggregate information across its teams to properly formulate a coherent picture of the situation, which led to failures of oversight. The SRA has been aware of some of these issues since 2023, the report added.”
• “‘The PM Law report makes for difficult reading,’ said Anna Bradley, chair of the SRA board. ’We are particularly sorry for the impact this has had on former clients of the firm and accept we should have done better by them.'”
• “An independent assessment by Berkeley Partnership has also been published regarding the SRA’s progress in meeting previous directions issued by the LSB regarding a similar case from last year.”
• “In 2025 the LSB issued directions to the SRA to better respond to risks and protect client money after British law firm Axiom Ince lost £60 million of client money and collapsed in October 2023. The LSB concluded that ‘there is not sufficient evidence to demonstrate that the changes introduced by the SRA’ have made a difference, and that they will tighten their oversight of the SRA.”
• “The SRA said they have already taken meaningful steps to address some of these reforms in a statement and will continue to make improvements.”

“SRA looking into dozens of reports of AI misuse” —

• “The Solicitors Regulation Authority has received dozens of complaints over the potential misuse of AI, as the profession continues to grapple with how to embrace the technology safely.”
• “A total of 42 reports of AI-related wrongdoing were received between July 2025 and July 2026, the SRA said, with a number of investigations ongoing. Issues under investigation include inaccurate legal citations, supervision and confidentiality.”
  It is also seeing instances of confidential client information being entered into public AI tools such as ChatGPT that lack appropriate safeguards, risking potential breaches of confidentiality and wider data protection requirements. ”
• “SRA executive director of strategy and policy Aileen Armstrong said: ‘AI is already benefiting consumers and legal professionals, and we are increasingly seeing firms use it in innovative ways to improve services and efficiency. However, the use of AI does not change the professional standards expected of solicitors and law firms.”
• “‘Firms and solicitors must have appropriate oversight and controls in place to make sure consumers are receiving high-quality legal services and that our standards are met. Individuals remain responsible for the work they produce and the advice they provide, regardless of whether AI is used, or not.’”
• “On sharing case details with the likes of ChatGPT, the SRA says this will likely breach client confidentiality and as a result, legal professional privilege may be permanently waived and unable to be recovered.”
• “Even where firms have developed or are exploring the use of in-house AI systems, there remains the risk of confidentiality breaches.”
  The Law Society welcomed the guidance and recognised that AI should be used to support and enhance legal practice, not to replace the essential role of solicitors in providing trusted advice to clients.”

“SRA Warning notice: Misuse of AI” —

• “This warning notice is relevant to all firms and individuals we regulate. It relates to the use of Artificial Intelligence (AI) in the provision of legal services by regulated firms and individuals. While it is directed at those we regulate, it is also likely to be relevant to other authorised persons practising within SRA-regulated firms.”
• “Solicitors and law firms are increasingly using AI in their day-to-day work. AI tools have become commonplace in the workplace and our everyday lives. Many solicitors and law firms use AI safely and responsibly, however the SRA has identified a number of cases involving the misuse of AI, particularly relating to the provision of inaccurate information and client confidentiality. It is crucial that you, and those at your firm, are using AI in ways that are compliant with SRA rules.”
• “The SRA takes an outcomes-focused approach to regulation. This means that we set the standards we expect solicitors and firms to meet, but we do not prescribe exactly how those standards should be met in different circumstances. Our outcomes-focused approach means that firms have the freedom to use AI tools and adopt new ways of working, provided they ensure that they meet our standards.”
• “We are concerned about two areas in particular. The first relates to court, or other, documents containing false or incorrect information, including citations, as a result of the misuse of AI. AI tools can produce ‘hallucinations’, generating fictitious cases, references or seemingly factual assertions that may appear convincing despite having no basis in fact.”
• “We are also concerned that those we regulate are not fully considering and appropriately mitigating risks to client confidentiality when using AI systems, particularly in relation to clients’ personal data or other confidential information. Both paid for and free-to-use AI tools may not provide the contractual, and technical safeguards needed to maintain client confidentiality. Firms should understand the safeguards that apply and ensure they are appropriate to the nature and sensitivity of the information being processed.”
  “Issues that we have observed to date include:
  • AI hallucinations in legal work and submissions to the court. We have received reports of potential breaches of our Code of Conduct from senior members of the judiciary. There have also been several instances of solicitors self-reporting where they have relied on AI tools that have generated inaccurate or misleading content.”
  • Instances of confidential client information being entered into public AI tools, risking potential breaches of confidentiality and wider data protection requirements.”
• Evidence of both the above issues have been identified through high-profile court cases. For example, R (on the application of Ayinde) v Haringey LBC [2025] EWHC 1383 (Admin)) highlighted that AI-generated case citations that turned out to be false were submitted to court, drawing public attention to the risks of using unverified AI outputs in submissions.”
• “In relation to client confidentiality, in UK v Secretary of State for the Home Department [2026] UKUT 81 (IAC), the Upper Tribunal commented on the potential for the use of public AI tools to breach confidentiality and legal professional privilege.”
• “We are concerned that some of those operating in the regulated legal sector are not fulfilling their obligations to uphold their duties to the courts, clients and third parties, and are not always following all relevant rules and regulations.”

“AI and liability: UKJT publishes its final statement” —

• “Following a consultation process, the UKJT has now published its final legal statement. Broadly speaking, the UKJT has maintained its earlier positions. For example, it continues to adopt a ‘technology agnostic’ definition of AI: ‘technology that is autonomous’. It also remains of the view that, as ‘a well-developed flexible common law system’, the English legal system is able to ‘provide certainty and predictability in the context of technological innovation’.”
• “The UK Jurisdiction Taskforce (UKJT) has now published a final version of its legal statement on liability for AI harms, following a public consultation earlier this year.”
• “The UKJT’s position remains largely unchanged from its draft statement: in most cases liability for AI harms will be governed by existing principles of contract or tort law. The UKJT expects that English law is sufficiently flexible to accommodate any novel issues arising from AI harms.”
• “However, the final statement does expand on the analysis in some key ways, including: the interplay between AI harms and non-delegable duties of care; the application of the ‘material contribution to damage’ approach to causation; and the availability of contributory negligence as a partial defence to claims arising from AI harms.”
• “It also reframes the approach taken in the draft statement to liability for defamatory statements published by AI.”

Quick Update on the BRB Risk Compensation Survey:

I’m quite pleased to see continued strong interest in our annual salary survey! I wanted to drop a quick note with a clarification/recommendation, based on a note from one firm.

Short version: Yes, you can totally have HR reach out directly to engage with this survey and submit data on behalf of the firm.

This comes up a few times each year. It’s not unusual for someone in risk to pass the survey on to HR. It’s fine to have an HR analyst fill things out. Just have them note their own title/email in the exercise, which will used solely to provide them with the final report.

Alternatively, from time to time a firm reaches out wanting to provide data via Excel vs the survey form. I’m happy to work with organizations to accommodate, so long as we’re able to collect the specific comp characteristics we’re looking for. Just sent those folks my email address (responses to the daily update go back directly to me) or the contact form on the blog to get in touch.

Thanks. And now back to your regular updates.

Talking to clients, or potential clients, or about work in law firm conference rooms containing an LG televisions? It may be prudent to investigate the implications of this news: “LG TVs caught spying even when offline or on standby” —

• “Smart TVs are built to siphon your data and sell it to advertisers or whomever else wants to know your viewing habits. LG, a screenmaker already coming off of a monitor adware scandal, has reportedly given its screens the ability to capture audio from your living room, even if the TV seems like it’s turned off.”
• “LG’s TVs can be sending this data even if the screen is off, according to the YouTubers’ findings. Gizmodo reached out to LG for comment, and we’ll update this post if we hear back. LG’s privacy policy explicitly gives the company consent to send data to advertising partners or law enforcement. LG also says it ‘may collect audio, electronic, visual, or similar information, such as video recordings’ through its ThinkQ app.”
• “The amount of data LG’s screens can log is staggering. The video describes how, with a few changes, these TVs are apparently able to identify devices using the home network, even those that aren’t actually connected to the TV itself. That includes the ability to identify several smartwatches and phones all on the same network.”
• “Security researchers who analyzed Gamer’s Nexus findings suggested that users disconnect their LG TVs from the internet. That’s not necessarily out of privacy considerations but more so for all the potential vulnerabilities hackers could potentially exploit.”
• “The bigger problem isn’t necessarily how some ne’er-do-well could hack your home screen to spy on you while it’s off; it’s the fact your data isn’t just used by advertisers. U.S. law enforcement has been caught buying advertising data from data brokers as yet another form of surveillance.”
  “That data can be linked directly to individuals, where such voice transcripts would be invaluable information for any law enforcement or government agency keeping tabs on U.S. residents. LG’s data collection may be especially egregious. Still, every TV owner is essentially giving up their privacy for the sake of buying a cheaper screen.”

Do take note that if your firm does use LG TVs, you may have a duty to inform everyone in the room (and maybe even on the network) where this happens. (Will let you ask your lawyers to navigate the implications. No legal advice here.) From LG’s Terms:

• “CONSENT REQUIREMENT: You acknowledge and agree that it is your sole responsibility to obtain all necessary consents from any third parties whose voices may be captured by the Product and to notify household members and guests that their voices may be captured and processed, in compliance with applicable wiretapping, eavesdropping, and privacy laws. If anyone does not consent, you should disable the microphone or voice features in the settings. LGE disclaims any liability for your failure to obtain such consent or provide such notification.”

“Carrot Top Accuser Wants Comic’s Lawyer Banned From Explicit Video Lawsuit – Claims Conflict of Interest” —

• “Billboard chart singer Brian Evans is demanding that Carrot Top’s lawyer be banned from their explosive legal battle, claiming the comedian’s attorney is caught in a conflict of interest that threatens the integrity of the case, RadarOnline.com can reveal. Evans has filed a motion seeking to disqualify attorney Ronnie J. Bitman and his firm, Bitman O’Brien, PLLC, from representing the comic, whose real name is Scott Thompson.”
• “According to court documents obtained by Radar, Evans claims Bitman is simultaneously representing Chad Fitzgerald, a defendant in a separate lawsuit Evans filed against Fitzgerald and his law firm, in a pending federal appeal – while also defending Carrot Top in the bombshell case.”
• “Evans argues the overlapping representation creates a major problem since Carrot Top’s defense could eventually require his attorney to investigate Fitzgerald’s conduct or take positions that could potentially hurt Fitzgerald’s interests. The filing claims Carrot Top may need to obtain documents from Fitzgerald, subpoena or depose him, challenge his account, or attempt to place responsibility on Fitzgerald or another person for the later handling of disputed settlement documents.”
• “Evans argues Bitman cannot independently advise Carrot Top about taking those steps while simultaneously owing Fitzgerald duties of loyalty and confidentiality.”
• “Evans wants Bitman and his entire firm immediately prohibited from filing motions, conducting discovery, attending hearings, participating in depositions, or otherwise acting as Carrot Top’s counsel while the judge determines whether they should be disqualified.”
• “The latest courtroom clash comes amid Evans’ disturbing allegations about his former personal and professional relationship with the Las Vegas entertainer.”
• “Evans is now asking the judge to disqualify Bitman and his firm or schedule an expedited evidentiary hearing to determine whether the alleged conflict prevents them from continuing to represent Carrot Top.”

“Fish & Richardson Slams IP DQ Bid As Possibly Manufactured” —

• “LVMH urged a Texas federal court to reject a bid to boot Fish & Richardson PC from defending the luxury goods business against an infringement lawsuit over patents for nonfungible token display technology, saying the company behind the suit may have tried to ‘manufacture’ a conflict to disqualify the firm.”
• “LVMH Moët Hennessy Louis Vuitton SE argued Monday that Watch Skins’ disqualification motion should be rejected based on its own misconduct, which included oversharing information with the firm and cold-calling a firm attorney.”
• “‘The record demonstrates, at every turn, that Watch Skins — not Fish & Richardson PC — is the party that acted improperly,’ LVMH said. ‘Watch Skins ignored multiple warnings not to share confidential information, ignored Fish’s decision to decline representation, and then, through a sophisticated co-founder represented by an experienced IP litigator, unilaterally transmitted information no one at Fish had requested.'”
• “Watch Skins alleges Paris-based LVMH and three other companies under the LVMH umbrella, including Swiss watchmaker TAG Heuer SA, infringed three of its patents on NFT smartwatch display technology. Watch Skins developed a platform that enables users to display their NFTs.”
• “LVMH said that while it could be that Watch Skins meant to ‘manufacture a conflict,’ its intent does not matter, because the firm carefully followed the rule regarding a lawyer’s duty to a prospective client. LVMH said the American Bar Association’s ‘safe harbor of Rule 1.18(d), now adopted in Texas, exists precisely to address this situation.'”
• “LVMH said it was contacted twice by Watch Skins, once via its website in December 2023 and a second time in July 2024 through a cold call to Fish & Richardson attorney Jennifer Huang, who is not listed as counsel in the instant case. LVMH said Watch Skins’ motion to disqualify the firm ‘misleads the court’ by not mentioning the website inquiry.”
• “Fish & Richardson’s website warns prospective clients against providing any confidential or sensitive information, but Watch Skins did it anyway, LVMH said. After receiving the website form from Watch Skins, the firm declined representation because it had a history of representing LVMH and warned Watch Skins again not to ‘share confidences.'”
• “‘This attorney also took steps to limit exposure to confidential information: requesting only specific categories of information necessary to screen a potential contingency representation and waiting for conflict clearance before disseminating any information received,’ LVMH said. Despite already being represented by other counsel and in disregard of Huang’s ‘limiting instructions,’ Watch Skins again ‘overshared,’ LVMH said. ‘The attorney promptly removed the additional information from her inbox and declined representation,’ LVMH said, adding that Huang has been screened from the matter.”
• “‘No prospective client should be allowed to poison a client’s law firm by arguing a conflict should be imputed under these circumstances,’ LVMH said, later adding that ‘Watch Skins has no explanation for waiting 15 months into active litigation before taking the drastic step of seeking Fish’s disqualification; it has waived the request.'”
• “LVMH said ‘this is a textbook case’ for the safe harbor exception spelled out in the ABA and Texas rules.”